In any case where you want to accept payments online, you’ll need a payment gateway.
For many small businesses, finding and choosing a payment gateway involves figuring out what payment gateways actually are, how they work and what you need to get started. Eventually, most aren’t that complicated.
However, if you’re looking for a payment gateway provider in the UK, there are dozens of options. Choosing between them can be challenging.
The table below gives a quick fee comparison of the top UK providers for payment gateways.
| Payment Gateway | Monthly Fee | Transaction Fee (UK) |
|---|---|---|
| Square | None | 1.4% + 25p |
| Braintree | None | 1.9% + 20p |
| Shopify Payments | £1- £259 | 2% + 25p or less |
| Ayden | None | 1%+10p+ |
| Amazon Pay | None | 2.7% + 30p+ |
| Authorize.net | £19 | 10p+/2.49% + 10p+ |
| Checkout.com | None | NA |
| Clover | None | NA |
| GoCardless | £0 - £200 | 1% + 20p+ |
| Payflow Gateway (PayPal) | £30 | 1.2% + 30p |
| Nochex | None | 2.9% + 20p |
| Opayo | £25+ | None |
| Klarna | NA | NA |
| Sumup | None | 2.5% |
| Stripe | None | 1.4% + 20p |
What Are Payment Gateways?
Payment gateways serve as the first point of contact between your webstore and the customer when the customer is paying. This software transfers information from the customer’s browser to the relevant parties associated with the transaction.
Once data is confirmed, the transaction is handed off from the payment gateway to a payment processor, which may be provided by the same company, or which may be your bank.
How Do Payment Gateways Work?
Here, every sale includes:
- Merchant, or the person making the sale
- Cardholder, or the person making the purchase
- Issuing bank, or the institution with the customer’s account or card
- Acquiring bank, or the institution with the merchant’s account
- Card scheme, or the credit card company (Visa, Mastercard, etc.)
Each of these parties needs information to verify the sale, verify the identity of the customer, verify that the issuing bank has the money the cardholder is trying to spend, etc.
In every case, that looks something like this:
- The cardholder initiates a payment by clicking “buy now”, “checkout”, etc.
- The payment gateway checks that the issuing bank has the available funds and that the transaction won’t exceed the customer’s credit limit/balance.
- The gateway sends card or payment data to card schemes or relevant banks to process the transaction.
- The card scheme approves the transaction.
- The payment gateway sends the information to the merchant website to finish the purchase.
- The payment gateway sends the information to the acquiring bank and money is moved into the merchant’s account.
In short, a payment gateway works to communicate between all relevant parties or stakeholders involved in the transaction.
Those parties can change depending on factors such as whether the cardholder is using a debit or credit card, if the purchase is international, or even if you have the same bank or not.
This is different than a payment processor, which simply processes payments directly. Payment gateways transfer data to banks, which process the payments for you.
How Much Do Payment Gateways Cost?
Most payment gateways charge three types of fees. These include:
- Transaction fee – Transaction fees are fixed rate charges and percentage charges. For example, these average between 12p per transaction and £1.00 per transaction depending on the gateway. In addition, you can expect to pay a percentage of the transaction. It’s common to pay rates such as 2.9-3.5%. However, most have a cap or a max amount to charge per transaction.
- Interchange fee – Interchange fees are mandated by your bank or card scheme. In most cases, these fees range between 0.3% and 0.4% for buyers from the UK and Europe. However, if you have an American customer, they could be charged as much as 2%.
- Monthly fee – Many payment gateways charge a monthly fee for using their software. Others are completely free. However, when you pay a monthly fee, you can expect rates to average £20 – £30 per month. In addition, many enterprise plans cost more per month. However, in most cases, the more volume of sales you have, the less likely you are to pay for your payment gateway on a monthly basis.
Best Payment Gateway Providers UK
If you’re looking for a payment gateway provider, it’s important to choose one that services the locations you intend to sell in. This means you should look at your primary market location as well as your business location.
The following list includes the top payment gateway providers in the UK.
1. Square
Square is one of the largest payment gateway providers in the world, with dozens of solutions for small and large businesses. In addition, the platform offers omnichannel support, including point-of-sale solutions.
Square also offers dozens of marketing tools, loyalty programs, and other ways to improve how you sell to customers.
It also stands out with full support for front-end eCommerce and for offline sales via mobile, invoicing, and even QR codes. That makes this payment gateway extremely flexible and suitable for microbusinesses and freelancers.
- 1.4% + 25p per transaction for UK cards
- 2.5% + 25p for non-UK cards
- No monthly fees
- Accepts all major credit and debit cards
- Accepts all major payment apps
- Integrated subscriptions, loyalty programs, and gift cards
- Point-of-Sale options available
Website: https://squareup.com/
2. Braintree
Braintree is a PayPal service delivering PCI-compliant payment gateways for Android, iOS, and the web. The payment gateway also integrates full fraud checks and prevention tools.
In addition, Braintree offers account management, recurring billing, and reporting, making it a good choice for small businesses that still have to manage revenue.
Braintree integrates via API and accepts cards, PayPal, Apple Pay, and Google Pay.
- 1.9% + 20p per transaction
- 2.4% + 20p for American Express (Amex)
- +1% fee for all foreign currency payments
- £20 chargeback fee
- No monthly fee
- No minimum earnings
- Accepts all major credit and debit cards
- Accepts Google Pay and Apple Pay
- Integrated iOS and Google payments
Website: https://www.braintreepayments.com/
3. Shopify Payments
Shopify Payments is integrated into Shopify’s store offering, making it an ideal choice for anyone looking to set up a Shopify store.
If you choose to do so, the payment solution is fully integrated into your store builder, meaning that buttons, links, and payment pages can all be customized and designed using the same tooling as your website. That can help you to create a truly seamless experience across your website.
In addition, Shopify offers its Payments platform for any account level, meaning you can use it even with a Basic account.
- 2% + 25p (Basic), 1.7% + 25p (Shopify), and 1.5% + 25p (Advanced) transaction rates
- +1% (or more) for international and Amex cards
- +2.2% or 2.1% for iDeal and Bancontact
- Additional third-party fees of 2%, 1% and 0.5% for payments not processed through Shopify Payments (if you only use the Gateway)
- £1 (basic), £49 (Shopify), or £259 (Advanced) monthly fees
- No minimum charge or monthly earnings
- Accepts all major credit and debit cards
- Integrated sales platform
- Point of sale options available
Website: https://www.shopify.com/
4. Adyen
Adyen is a payment processing platform with an online payment gateway. The service, which was launched in the UK in 2006, is one of the largest in the world.
It also offers PSD2, SCA and PCI compliance as a standard. Plus, as an API, you can integrate Adyen into your website, into your apps, or into any other platform.
Adyen also supports form and drop-in builders, meaning you can integrate without a great deal of tech experience.
Adyen also accepts all major cards, iDeal, payment vouchers and much more, making it an extremely versatile payment gateway.
- 10p fee for most transactions
- 1-30% fee for cards and payment methods depending on the issuer
- No monthly fees
- No minimum earnings/sales
- Supports multiple bank accounts
Website: https://www.adyen.com/
5. Amazon Pay
Amazon Pay is a checkout option that uses payment methods stored in the customer’s Amazon.co.uk account.
Rather than asking for new data, the payment is processed through Amazon and then paid to your account. This allows customers to log into their payment processor directly to make payments to your store.
In addition, Amazon accepts all major debit cards, credit cards, and direct debit. This makes it one of the few payment gateways that support bank payments.
- 2.5% + Interchange + 30p transaction fee
- +0.4-1.5% for international transactions
- 0.5% currency conversion fee
- £14 chargeback fee
- No monthly fee
- Minimum payout threshold of £100
Website: https://pay.amazon.co.uk/
6. Authorize.net
Authorize.net is a Visa-owned payment gateway provider based in the United States. However, the payment gateway also offers global service including full support for the UK.
Authorize.net also offers numerous solutions for small and large businesses, with virtual point-of-sale, mobile payments, monthly billing, and phone payments integrated into the platform.
Authorize.net also has full support for debit and credit cards, eChecks, and digital payment apps.
- 10p per transaction
- £19 per month
- With Merchant Account, fees go to 2.49% + 15p per transaction
- Setup fee £35
- Support for all major cards and payment apps
- API or SDK support
- Integrated fraud prevention
Website: https://www.authorize.net/
7. Checkout.com
Checkout.com is a full-service payment gateway, processor, risk engine and payment acquisition platform. You can also choose to only use the payment gateway.
The platform is also optimized for global eCommerce, with support for multiple currencies, currency conversion and international payments.
Like other large payment gateways, Checkout.com integrates fraud detection and prevention into its platform. In addition, it offers an API, which you can use to integrate into websites, apps and other platforms.
- Pricing is fully flat rate
- All pricing is customized to the business
- See interchange rates as part of every transaction
- No monthly fees
- Payment processing available
- Full support for all major payment options
Website: https://www.checkout.com/
8. Clover
Clover is primarily a point-of-sale solution. However, the brand also offers a payment gateway, ideal for eCommerce and omnichannel sales.
Clover also offers email and phone payments, making it suitable for micro businesses looking for invoicing tools.
Clover also offers full account setup within 3 days, making the brand a great choice if you have deadlines or want to accept payments quickly. In addition, with a full API, clover integrates into your apps and website.
- Rates average 2% per transaction
- No upfront rates, all pricing is custom
- No monthly fees
- Point of Sale solutions available
- Supports all major credit and debit cards
Website: https://uk.clover.com/
9. GoCardless
GoCardless is an online payment gateway offering full support for bank payments.
However, GoCardless does not support any credit or debit card payments. That makes this solution ideal if you want to avoid credit and debit cards or if you already accept card payments and would like to add direct debit.
In addition, GoCardless enables you to collect recurring and variable payments. This makes the service ideal for subscriptions, housing associations and investors and other business owners who normally have to bill for larger amounts over a longer period of time.
- 1% + 20p per transaction capped at £4
- +1% fee for international payments
- +0.3% for payments over £2,000
- Fees range from £0 to £200 per month depending on account level
- Customers have to set up an account to make payments
- No support for cards or digital wallets
- Accepts bank transfer and direct debit
Website: https://gocardless.com/
10. Payflow Gateway
If you use PayPal Payments Pro, you can utilize the Payflow Gateway to accept payments outside of PayPal.
This allows you to take advantage of PayPal’s name brand, compliance standards and security with fraud protection without having to transfer money out of a PayPal account after accepting it.
That can simplify your payment gateway over using PayPal as a payment processor. However, fees can be high compared to some alternatives.
- 1.2% + 30p for card payments in the UK
- +1.29% for EEA international payments
- + 1.99% for non-EEA international payments
- £30 monthly fee
- Accepts all major currencies
- Accepts all major credit and debit cards
- Does not require customers to have a PayPal account
Website: https://www.paypal.com/ee/business/accept-payments
11. Nochex
Nochex is a UK-based payment gateway provider. It’s also one of the only options in the UK offering custom solutions and rates for charity shops.
In addition, Nochex offers transparent fees and rates, with a merchant account integrated into the payment gateway.
Finally, as a relatively small business, every Nochex account receives local support. That can be highly beneficial to small business owners without the technical know-how to handle integrations and compliance setup without support.
- 2.9% + 20p transaction fees
- Charity accounts reduce rates to 1.9% + 20p
- Integrated subscriptions, monthly billing and invoicing
- Accepts all major credit and debit cards
Website: https://www.nochex.com/
12. Opayo
Opayo is a payment gateway provider offering services to the UK and Ireland. The provider also stands out with multiple integration options. However, it does not offer an API, meaning this payment gateway is best suited for web sales.
In addition, Opayo is designed around the needs of small businesses. You get flat-rate pricing, an integrated merchant account and integrated sales buttons. However, Opayo does not offer tooling for large businesses.
- Flat rate pricing from £25 per month for up to 350 transactions
- £45 per month for up to 500 transactions or 9p per transaction
- Point-of-sale options available
- Phone sales available
- Accepts most major credit cards
- Integrates into most major eCommerce platforms
Website: https://www.opayo.co.uk/
13. Klarna
Klarna is one of Europe’s largest payment gateway options. The payment processor also offers fully global support, with offices in 20+ markets.
In addition, Klarna supports direct bank payments, payment installments, and other post-payment purchase options. That makes Klarna popular with retailers that want to enable customers to pay for purchases later.
Klarna also supports most major payment options. However, customers will have to sign up for an account in order to use it.
- No upfront pricing/Pricing is always customized
- No monthly fees
- Only suitable for mid-size and larger businesses
- Klarna offers your customers financing options
Website: https://www.klarna.com/
14. SumUp
SumUp is primarily a point-of-sale provider. However, the card reader brand also offers a full payment gateway, making this a very good solution for small businesses looking for omnichannel sales support.
In addition, SumUp offers payment links and integrated invoicing.
In addition, with no monthly minimums and no monthly fees, SumUp is very friendly to micro businesses and startups. SumUp also offers a selection of business tools, including online store builders to help you get started.
- 2.5% transaction fee for online payments
- 1.69% transaction fee for card readers
- Point of sale solutions available
- No monthly fees
- Offers a store builder
Website: https://www.sumup.com/
15. Stripe
Stripe is a payment processor with a payment gateway. The solution also offers integrations, an API and support for developers, making it an ideal option for startups and tech businesses.
In addition, with invoicing, payment processing, autofill and other account management, Stripe can be a full-service solution for many merchants.
Plus, with support for 135 currencies and almost all major cards, this is an ideal checkout option for international stores. Additionally, you can accept Google Pay, Apple Pay and other major payment providers.
- 1.4% + 20p for UK cards
- +1.1% for EEA cards
- 2.9% + 20p for all other cards
- 1.2% + 20p for UK cards using Link
- No monthly fees
- Offers SKD and API
Website: https://stripe.com/
Types of Payment Gateways (Integration & Development)
There are many ways to integrate a payment gateway into your website, application, or web app. Here, methods usually depend on support and what you want for your business.
For example, the four most common options include offsite payment, direct post, server integration and advanced integration.
Offsite Payment
Many payment gateways use this method.
Here, you integrate the payment gateway into your website or app and then when the customer clicks “Purchase” or “Buy Now” they are redirected to the payment gateway. PayPal, Stripe and others use this method.
Offsite payment is advantageous because it requires very little technical know-how.
In addition, you won’t have to maintain or secure the payment gateway in any way. It’s completely off of your website and therefore up to the provider to maintain.
Direct Post
Direct Post or Transparent Redirect allows you to forward payment information to a gateway while keeping the customer on your website.
This can be preferable for branding purposes. However, it normally requires that you use an API or SDK to integrate the payment gateway.
Direct Post requires more work from your development team.
In addition, it has a weak point in terms of security, in that information is collected on your website and transferred to the payment gateway. That could mean you’re more at risk of losing customer data.
However, you won’t always have to develop an integration in order to use transparent redirects. Many eCommerce platforms offer them out-of-the-box via plugins.
Server Integration
Server integration means that you develop the form and data collection on your website or app. This gives your brand more control over the transaction.
However, it also means you’ll have to pass PCI DSS compliance for your website.
This option is normally only suitable for larger businesses with significant interest in maintaining branding.
Advanced Integration
Advanced integration means that you collect payment information on your own server and then transmit that data to the payment gateway. This normally happens when you use a shopping cart app.
Here, it can secure the process, because you transmit less data back and forth between your website and the shopping cart. Instead, the hopefully fully secure shopping cart does all of the communication with the app – meaning you improve security.
Payment Gateways vs Accelerated Checkouts
A payment gateway serves to communicate between all parties involved in an online transaction.
Meanwhile, an accelerated checkout is a form of payment gateway in which customers can save their data and check out without adding payment information again.
For example, Amazon Pay, Google Pay, Apple Pay and others all function as accelerated checkout offerings.
In short, you always need a payment gateway. However, accelerated checkouts are primarily for your customer – in that they simplify the checkout process.
However, they may also build trust, because you’re using a reputable payment provider like PayPal or Amazon.
Differences Between Payment Processors and Payment Gateways
A payment processor can mean a payment service provider that also handles your money or a merchant account.
In the case of the merchant account, the payment processor is the software that actually requests money from the cardholder’s account and transfers it to yours.
Payment gateways serve to communicate data between stakeholders involved in a payment transaction – for example, between the cardholder, merchant, merchant bank, cardholder bank and issuing card scheme.
This means that the payment gateway never actually handles the money.
Instead, the gateway communicates how much money is needed, the issuing bank confirms the money is available, the gateway communicates that back to the merchant website and the merchant website bank is told to make the request from the issuing bank.
Payment processors directly handle the money on your behalf. This changes the full process of request and payment because the payment processor checks if the issuing bank has the money and then asks for it directly.
That money is then deposited in the payment processor’s account – where it is forwarded to your bank, usually on a schedule, within a set number of days, or when you hit a certain balance.
For example, Amazon is a payment processor that pays out when you have a balance of over £100. PayPal pays out on request. And, Stripe pays out within 3 business days of receiving payment.
So, not all payment processors use the same payout functions. However, they all offer a very similar function in that they directly request money on your behalf.
Payment Gateways and PCI-DSS Compliance
If you’re accepting payments online, you have to comply with PCI-DSS. This regulatory standard ensures that payment solutions are reasonably secure from physical and cyber-attacks.
In most cases, the only reason you’d have to worry about PCI-DSS with a payment gateway is if you’re handling the payments yourself, on your own server. If you keep or store customer payment data, you have to be PCI-DSS compliant.
However, most payment gateways are completely separate from your site. Redirect and transparent redirect methods both ensure that customer data is never on your site.
So, it’s up to the payment gateway provider to maintain PCI DSS compliance. This is good for small businesses because achieving compliance can involve thousands in penetration tests, assessments, development, and audits.
5 Benefits of Payment Gateways
Payment gateways are one of the standard ways to accept payments online.
While there are alternatives like payment processors, most merchants prefer payment gateways. Here’s why.
1. Light Compliance Requirements
Most payment gateways are already fully PCI-DSS compliant. Others offer additional security standards like PSD2 and SCA.
Often, this means the only compliance you’ll have to do is to ensure you follow instructions. If you’re using an API, you’ll also have to secure that. Otherwise, you can skip pen testing and audits.
However, some forms of payment gateway integration will require that you do PCI DSS compliance yourself.
In most cases, these options are not recommended for non-enterprise businesses because they add considerable cost.
2. Money Transfers Directly to Your Bank
Payment gateways ensure that deposits move from your customer’s account directly to your account. This enables you to receive money more quickly and without storing it in a third-party account.
For many businesses, this increases security, improves cash flow and cash-on-hand availability and enables you to more easily track sales to incoming transactions for accounting and tax purposes.
However, some types of businesses greatly benefit from payment providers and the extra insights and analytics they provide into cash flow. Therefore, you should decide based on what your business actually needs.
3. Fast Setup/Light Technical Requirements
Many payment gateways are simple to set up.
In some cases, setup can be as simple as verifying your bank account and identity and then copy-pasting an embed code into your website. In others, you will need a developer to integrate API or SDK for better security.
However, you can choose to use very simple solutions that require very little technical knowledge.
4. Accept More Payment Options
Payment gateways are normally built to accept as many payment options and currencies as possible. That can allow you to reach more customers and offer more convenience.
However, that isn’t always true. GoCardless, for example, only accepts direct debit payments. On the other hand, Stripe accepts over 135 currencies from almost all major payment providers.
5. Ensure Security
Payment gateways normally offer encryption, risk analysis, and fraud detection as part of their service. Some gateways even integrate advanced analytics to attempt to detect fraud or potentially risky behavior.
That can improve customer security, reduce chargebacks and improve your business compliance and security.
Considerations & What To Ask For
If you’re choosing a payment gateway, figuring out which provider offers the best solutions for your needs can be difficult. In fact, many payment gateway providers will offer very similar services and offerings.
However, it’s important to decide what you need, assess which factors are important for your business, and see what the payment gateway provider offers before making a decision.
Pricing
Pricing will always be a top concern for most small businesses.
However, it shouldn’t be the most important factor. If one payment gateway charges more but offers features or security options you need, it’s better to choose the option that meets your needs.
Most payment gateway providers charge between 1% and 3.4% per transaction with a flat-rate fee between 10p and 30p. However, those rates vary considerably and most will offer volume discounts for larger businesses.
Is Merchant Account Included?
You need a merchant account to request payments from banks. Here, you may have to open a separate account for your merchant account.
Other payment gateways include the merchant account as part of the service.
In some cases, you can set both up with the same company for different fees. However, you will need the service, so it’s a good idea to check if it’s included.
What Cards/Payment Methods Are Accepted?
If you know which types of payment cards or methods your customers are using, you know what to prioritize and look for when choosing a payment gateway.
For example, if you’re selling primarily accessories for Apple products, Apple Pay should be a must. On the other hand, if you’re offering recurring services, recurring billing or direct debit would be more important.
What’s The Holding Time?
Most payment gateways hold payments for 1-7 days after billing. This may or may not be important to you when choosing a provider.
However, it is important to know so you can manage your cash flow.
What Currencies Are Accepted?
If you’re only making sales in the UK, this shouldn’t be an issue. However, if you want to sell internationally, you’ll want to ensure that your payment gateway supports those currencies.
Here, you’ll also want to look at conversion rates and transaction fees for international cards.
What Security Is Included?
It’s important that your payment gateway offers PCI-DSS compliance. In addition, you’ll want to ensure that the provider uses encryption.
If you have special security requirements because of your sales area or because of what you’re selling, the gateway should be able to cover that as well.
What Integrations Are Offered?
Many payment gateway providers offer SDK and API options. Many also offer pre-built integrations and connections to accounting apps, eCommerce platforms, and payment processors.
If you know which apps you are using or want to use, you can check for those integrations to ensure that setup is as easy as possible.
Next Steps
Payment gateways are important for accepting payments online. If you’re looking for one for your small business, the UK has plenty of options. In addition, many of them offer features such as payment processing, merchant accounts and many other payment services. That means you’ll have plenty of options, including payment services that meet all of your needs.